Chapters+4++10-4-2006+

Chapters+4++10-4-2006+ - (1/17/2006) 1 Chapter 4 Consumer...

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Unformatted text preview: (1/17/2006) 1 Chapter 4 Consumer Demand Consumer Demand (1/17/2006) 2 Consumer Demand How do consumers make decisions on what to buy, how much, at what price? What factors impact consumer decisions? Preferences Income Prices (1/17/2006) 3 Market Demand for a Product Market demand for a specific product is determined by Consumer preferences/tastes Income of consumers Expectations Other goods Number of consumers in the market (1/17/2006) 4 Utility Theory Utility in Economics refers to expected pleasure or satisfaction Total utility refers to the amount of satisfaction obtained from your entire consumption of a product Marginal utility refers to the amount of additional satisfaction you get from consuming the last unit of the product. (1/17/2006) 5 Law of Diminishing Marginal Utility As long as marginal utility is positive, total utility is increasing Additional units of a good will eventually yield smaller increments of utility (satisfaction) (1/17/2006)...
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Chapters+4++10-4-2006+ - (1/17/2006) 1 Chapter 4 Consumer...

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